LANSING (WWJ/AP) – You’ve been hearing the stories about some homeowners lining up to pre-pay next year’s local property taxes. That apparently won’t be happening in Michigan.
Milford Township officials say prepayment of next year’s taxes is NOT allowed under Michigan state law (MCL 211.44).
The tax overhaul signed last week by President Donald Trump puts a new $10,000 limit on the amount of state and local taxes people can deduct from their income when calculating their federal tax liability. That new cap could translate into a tax hike of hundreds or even thousands of dollars in mostly wealthier, high-tax communities. People in some states have been lining up to pay their 2018 taxes early, hoping for one last shot at the exemption.
The IRS says that some homeowners who pay real estate taxes early will be able to claim the deduction, but only if the taxes were assessed, billed and paid in 2017. People can’t guess at what next year’s assessment might be, pay it now and claim a deduction for that amount.
“A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017,” the IRS said in a statement.
State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.
© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.